Correlation Between Kamino and KEY
Can any of the company-specific risk be diversified away by investing in both Kamino and KEY at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kamino and KEY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamino and KEY, you can compare the effects of market volatilities on Kamino and KEY and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kamino with a short position of KEY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamino and KEY.
Diversification Opportunities for Kamino and KEY
Good diversification
The 3 months correlation between Kamino and KEY is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kamino and KEY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEY and Kamino is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kamino are associated (or correlated) with KEY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEY has no effect on the direction of Kamino i.e., Kamino and KEY go up and down completely randomly.
Pair Corralation between Kamino and KEY
Assuming the 90 days trading horizon Kamino is expected to under-perform the KEY. But the crypto coin apears to be less risky and, when comparing its historical volatility, Kamino is 1.48 times less risky than KEY. The crypto coin trades about -0.14 of its potential returns per unit of risk. The KEY is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 0.10 in KEY on November 7, 2024 and sell it today you would lose (0.03) from holding KEY or give up 30.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kamino vs. KEY
Performance |
| Timeline |
| Kamino |
| KEY |
Kamino and KEY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kamino and KEY
The main advantage of trading using opposite Kamino and KEY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamino position performs unexpectedly, KEY can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in KEY will offset losses from the drop in KEY's long position.The idea behind Kamino and KEY pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |